Apple iPhone 6 In 2014 May Feature TSMC-Built A7 Chip; iPhone 5S Production Reported To Begin This Quarter With Size, Shape Similar To iPhone 5

Jefferies analyst Peter Misek says that Apple will launch the iPhone 6 with a bigger display in June of 2014 as the company is preparing for the release of the iPhone 5S this year.

Photo: Reuters

With the release of the Samsung Galaxy S4, the smartphone war has reached a new level with expectation now returning to Apple and its upcoming iPhone model.

Adding to the next-iPhone rumor mill, Taiwan's Economic Daily News (Google translation) reported Tuesday (via Macotakara) that the 2014 model of Apple’s iPhone will be called the “iPhone 6” and will likely to be powered by a new A7 chip.

The report stated that Apple’s A7 chips would be developed by Taiwan Semiconductor Manufacturing Co., rather than Samsung, which has made all of Apple's A-series chips until now, including the A6 chip in the iPhone 5 and the A6X chip in the iPad 4. The report cited "high-ranking officials" at Samsung, saying that the company has not received orders for an A7 chip.

Given the lack of contact with Apple regarding the A7 chip, there is speculation building inside Samsung that the California tech giant might have shifted the orders for the chip to TSMC.

According to the report, the current contract for A-series chips between Apple and Samsung expires in June. If it is not extended, Apple will be allowed to shift the production order to TSMC without any penalty.

TSMC, on the other hand, is reportedly preparing to begin installation of production equipment for its 20-nanometer chips facilities on April 20, two months ahead of schedule. The company’s CEO Morris Chang has predicted that the smaller 20-nanometer chips that are set to debut next year will sell more than the company's existing 28-nanometer chips in the first couple of years.

Tuesday’s report comes on the heels of another report that Apple and TSMC collaborated on the designs for the 20-nanometer A7 chip, with shipments to commence early next year.

If the current rumors of a 20-nanometer A7 chip for 2014 prove true, what could be the options available for Apple for its 2013 iOS product lineup?

A MacRumors report opines that “Apple will need to use a different solution for its 2013 iOS device models, with options including a die shrink of the current A6 chip from 32-nm to 28-nm, a more substantially revamped A6 chip, or an early A7 chip based on a 28-nm process.”

But another report from AppleInsider has suggested that the branding of the A7 chip for the iPhone 6 could be incorrect. “TSMC could in fact be working on a 20-nanometer chip for Apple that could be known as an ‘A8,’ or something else entirely,” it writes.

iPhone 5S Production To Begin This Quarter; June Launch Likely?

While the question still remains whether the improved processor in this year’s iPhone iteration, aka iPhone 5S, will be A7 or not, a report from The Wall Street Journal has suggested that Apple is going to start production of the next iPhone model in this quarter ahead of a possible summer launch.

Citing “people familiar with the device's production,” the WSJ report stated that the new iPhone will look similar in size and shape to the existing iPhone 5. But despite a form factor akin to the current version, the new handset is widely expected to sport a faster processor, better display and an improved camera.

When it comes to the summer launch of the device, the report corresponds to a number of earlier reports that suggest the iPhone 5S will be released in June or July.

Macotakara reported last week that Apple would unveil the iPhone 5S at an event that has been scheduled for June 20. Prior to that, KGI Securities analyst Ming-Chi Kuo also said in a recent research report that the iPhone 5S and a low-cost version of the device would be released in June alongside iOS 7.

Low-Cost iPhone Due In Second Half Of 2013?

In addition to the iPhone 5S, the WSJ report talks about a cheaper model of the handset. According to the report, the less expensive iPhone model will come with a 4-inch display but will have a different casing.

“At the same time, Apple continues to work with its manufacturing partners in Asia on a less expensive iPhone that could be launched as soon as the second half of this year, these people said. The 4-inch device will likely use a different casing from the higher-end iPhone. Apple has been working on different color shells for the phone but its plans remain unclear,” says the report.

Although the report did not say much about the budget iPhone’s features, recent rumors suggest that the handset might feature a plastic or polycarbonate body, allowing Apple to sell it at a lower cost, even less than $300.

Apple’s Chief Executive Tim Cook has not made any comments on the rumors of a budget iPhone. However, reports suggest that Cook and other executives “have been fighting to protect Apple's premium image,” saying that they “wouldn't do anything that we consider not a great product.”

Only time will tell whether Apple considers a low-cost iPhone to be a “great product,” and if it does, it would be quite interesting to see how the handset performs in the targeted emerging markets.